Ford to invest in China's heavy-truck market

Detroit Free Press - Ford is getting into China’s large heavy-truck industry with today’s announcement that its Chinese partner Jiangling Motors Corp. is buying Taiyuan Changan Heavy Truck Co.

JMC will pay an undisclosed amount of cash for the 80% stake currently held by China Changan Automobile and the 20% holding of China South Industries Group Corp. Upon completion of the deal, which awaits Chinese government approvals, Taiyuan Heavy Truck will become a wholly owned subsidiary of JMC.

Ford has a 30% stake in JMC, which makes light commercial vehicles and SUVs, including the Ford Transit.

JMC plans to invest in the segment, introducing new trucks and improving the existing lineup.

China, a country synonymous with growth, has the world’s largest auto industry including the highest volume of heavy-truck sales. Last year, the roughly 1 million heavy trucks sold in China was more than North America, South America and Europe combined, even though growth has slowed from prior years.

“JMC’s acquisition represents a great opportunity to continue to expand the breadth of our business in China across vehicle segments,” said Dave Schoch, chief executive of Ford Motor China in a statement. Schoch attended a signing ceremony today in Taiyuan.

“A strong heavy truck operation like Taiyuan will complement Ford’s existing passenger car and light commercial vehicle operations here in the world’s largest and fastest-growing vehicle market.”

The region has a lot of raw materials and energy resources such as iron, coal and electricity which fuel demand for heavy trucks.

Ford is adding nine new plants in Asia Pacific and has been aggressively expanding its passenger car capacity.

But today’s announcement addresses the commercial vehicle side of the business.

Ford plans to introduce 15 new vehicles and 20 new powertrains in China by 2015.

Among the five new plants in China is a $300-million facility in Nanchang where JMC is based. The plant will have capacity to build 300,000 JMC and Ford-branded trucks a year when it starts production next year.

Ford has invested $4.9 billion in China to catch up with market leaders such as General Motors and Volkswagen.

JMC sold more than 190,000 vehicles in 2011 with revenue of about $2.7 billion.